The Creative Society is an arts employment charity that helps young people into jobs in the creative and cultural industries.
Some New Year cheer for the young unemployed. As those with jobs returned to work after the Christmas break, the Prime Minister announced the launch of the New Enterprise Allowance. The scheme will get underway in Merseyside later this month and is intended to be fully functional around the country by the end of the year. The bare bones are as outlined last October, a package of up to £2,000 financial support for those who have been unemployed for six months. The offer will include a start-up loan and a weekly allowance (broadly replacing jobseekers’ allowance for three months). David Cameron has described it as part of a drive to support job creation around the country.
The scheme bears a strong resemblance to Margaret Thatcher’s 1980s Enterprise Allowance Scheme, which aimed to get people off the official list of unemployed by offering to continue paying benefits to those starting up small and one-person businesses. New Deal of the Mind has pressed for a return of that scheme because, beyond cosmetic improvement of the unemployment statistics, Thatcher’s scheme had some very positive unintended consequences (download a copy of NDotM’s report on creative self-employment here). The EAS is now seen as a great success not only by Thatcher’s supporters but also among many who would have classed themselves as her political opponents.
One unexpected and valuable consequence of that 1980s scheme was the chance it gave to many creative people – musicians, artists, fashion designers – to launch stellar careers going on in some cases to employ hundreds more people. Politicians of all parties credit the EAS with forging the UK’s strong creative economy in the two decades following.
Will Cameron’s New Enterprise Allowance have the same success? It is certainly good news that he has extended the Government’s ambitions for take-up from 20,000 to 40,000. However, there is no evidence so far that this is being sufficiently targeted at the most needy group, the under-25s, a cohort which we have argued must be the priority if we are not to lose a generation of talent to the dole queue. Cameron’s scheme is available only to those who have been on benefits for 6 months. This is too long for a young person to remain hopeless and idle. The evidence of the 1980s scheme is that the longer someone remains on the dole, the less likely they are to make a success of self-employment. Martin Bright looks at the whether the New Enterprise Allowance Scheme is enough here, as does John McTernan here.
Much, too, will depend on what replaces Business Link and how easy it is for new start-ups to get support, mentoring and advice. The biggest mistake would be to see the NEA as a quick fix just for getting people off the dole or merely as a means to regularise the informal economy. Encouraging young people to use their talent and passion to make a go of a freelance or one-person business must be the priority and focus of the scheme. As the civil servants implementing Thatcher’s scheme found, the right kind of help at the beginning produces long-term results and leads to further job creation.
We urge the Coalition to put a bit more effort and money into this. Don’t make young graduates twiddle their thumbs for 6 months. Make sure the right kind of support (not policing) is available. And finally, keep the benefit going long enough – up to a year – for a business to get well and truly moving.